Home interior and innovation unicorn Livspace
has laid off 1,000 employees, or 12% of its workforce, amid AI push. In a statement, the startup’s spokesperson said that integration of advanced AI agents and automation across its core functions – sales, operations, design, and marketing – resulted in the job cuts.
The company said that the decision wasn’t a reactive cost-cutting measure but rather a strategic reallocation of resources for the long run. “We are investing heavily in AI and technology that allows us to deliver better customer outcomes with more precision. We are choosing to lean into the future of work rather than clinging to legacy operational models,” the spokesperson added.
Moneycontrol was the first to report the development. The report said that the layoffs impacted about 25% of its workforce.
The spokesperson noted that the layoffs took place over the last six months as it tested and deployed AI agents across various functions. The pace allowed Livspace to ensure that as “manual roles” were phased out, its automated systems were fully capable of maintaining its standard of service.
Amid the job cuts, the startup’s cofounder and India CEO Saurabh Jain also quit to pursue “personal interests”. As per the startup, Jain helped lay the groundwork for Livspace’s AI avatar, which allowed it to cut these many roles.
“Sometimes you have to close a meaningful chapter — not because the story ends, but because a bigger one is ready to begin,” cofounder Jain said in a post on LinkedIn.
Founded in 2014, Livspace operates an omnichannel home interiors and renovation platform which connects homeowners with professional interior designers, contractors and vendors for design.
Livspace has raised over $450 Mn in capital to date from the likes of KKR, Ingka Group Investments (IKEA’s parent), TPG Growth, Goldman Sachs, Bessemer Venture Partners and Jungle Ventures, among others.
It is worth mentioning that rapid advancements and adoption of AI have been leading to job cuts across companies. From tech majors like Amazon, TCS, and Microsoft to startups like Cleartax, a plethora of companies have cut jobs due to rising automation due to the use of AI.
While AI is expected to lead to improvement in efficiency and increase productivity, its impact on employment has been one of the key concerns across the globe. The Economic Survey 2025-26 highlighted that while AI promises significant productivity gains and economic growth, it poses a substantial risk of labour displacement, particularly in India’s service-oriented IT and BPO sectors.
OpenAI founder Sam Altman, who is in India for the ‘India AI Impact Summit 2026’, said yesterday that there is a growing trend of blaming AI for job cuts. While acknowledging that AI is displacing jobs, he said many companies are using it as a veil for routine cost-cutting.
“I don’t know what the exact percentage is, but there’s some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there’s some real displacement by AI of different kinds of jobs,” Altman told CNBC-TV18.
That being said, India is still looking at a massive shift in the job market with growing AI adoption. As a result, training and skilling of employees will need to rapidly transform to getting the workforce ready for an AI-coworker environment.
According to Cornerstone Ventures’ managing partner Abhishek Prasad, upskilling the workforce in AI is equally challenging for employers. This will need employers to completely change their operating protocols, project and task planning, talent sourcing and training, assessments and appraisals, as the day-to-day scope of work itself transforms.
Source – https://inc42.com/buzz/livspace-fires-1000-employees-cofounder-quits/